Our last post began a two-part examination of President Obama’s trade policy which highlights three areas:
- Expanding market access through trade agreements
- Enforcing trade rules in favor of US businesses
- Expanding exports through an SME Initiative and the National Export Initiative
Part I assessed the Obama Administration’s performance in expanding market access. This post discusses the two other components of the President’s trade policy. (Analysis of trade and development issues are being left for a later post.)
Enforcing Trade Rules
Recognizing that negotiated agreements yield results only if they are enforced, the President’s 2012 Report commits to continue its use of the World Trade Organization (WTO) and other dispute settlement mechanisms to promote compliance by its trading partners. Other trade enforcement mechanisms include the use of anti-dumping and other trade remedy laws. At the same time, as our previous post on “Hangars and Catfish Wars” explains, use of such tools can have unintended consequences on international traders.
The President’s Trade Report also highlights U.S. concerns about China’s compliance with international trade rules. Thankfully, it forgoes China-bashing in favor of using international trade rules to address these concerns.
In March, 2010, President Obama by Executive Order launched the National Export Initiative. Though presented as a component of the Obama trade policy, this initiative is actually a domestic policy tool to facilitate job creation through the growth of U.S. exports.
The Obama Administration has identified the goal of doubling U.S. exports by 2015. It aims to accomplish this goal by: (i) expanding market access; and (ii) working domestically to help companies, in particular small businesses, to enter and succeed in the export market. The National Export Initiative (NEI) addresses the second component.
The NEI created an Export Promotion Cabinet to develop and coordinate its implementation, including:
- Programs to enhance export assistance to small and medium-sized enterprises (SMEs), in particular information and technical assistance to first-time exporters and identification of new export opportunities
- Increase by the U.S. Export-Import Bank of the credit available to SMEs
- Development of a framework to promote trade in services
- Promotion of existing Federal resources available to assist exports by US companies
Sitting on this Cabinet are the Secretaries of State, the Treasury, Agriculture, Commerce and Labor; and the heads of such executive agencies as the Office of the U.S. Trade Representative (USTR), the U.S. Export-Import Bank, the Overseas Private Investment Corporation, and the Small Business Administration. The Cabinet reports directly to the President.
There is evidence that the Cabinet is doing its work. Previous posts on this blog have discussed initiatives initiated earlier this year. Access to Cash for International Trade refers readers to the launch by the U.S. Export-Import Bank of its Global Access for Small Business program.
In this video a U.S. businessman shares his experience in working with the bank:
The President’s 2011 Report on Trade highlights the following increases in U.S. exports between 2009 and 2011:
- 33.5% increase in export of total U.S. goods and services
- 19.7% increase in export of U.S. services;
- 33.4% increase in export of U.S. manufacturing goods;
- 38.6% increase in export of U.S. agricultural products
Keeping in mind the challenging global environment over these years, these are indeed accomplishments to be lauded. At the same time, it is probably too early to link such results to the launch of the NEI and the Cabinet’s work.
The President’s 2012 Trade Policy Agenda promises to continue to implement the 70 recommendations outlined by the Export Promotion Cabinet in its September 2010 NEI Report to the President. Priority No. 1 in this document is increasing exports by SMEs. Recommendations include realigning the services, marketing and outreach by the relevant agencies on the Cabinet so they can:
- Identify SMEs that can begin or expand exporting,
- Prepare SMEs to export successfully,
- Connect SMEs to export opportunities, and
- Support SMEs once they find export opportunities.
The Report promises that the Administration will report later in 2012 on the full array of NEI implementation activities, including on Government-wide metrics to measure ongoing NEI progress. Watch this space!